The topic of land use planning has featured on a number of occasions in this series of Natural Resource Economics Discussion Papers. Within the wider topic of land use planning, the issue of rural smallholdings has received attention in Discussion Papers Nos. 3, 5 and 8. This ninth Discussion Paper again deals with issues relating to rural smallholdings. The reason for continued emphasis on this topic is that the rural smallholdings 'conflict' is a dynamic land use issue. As the tastes, desires and objectives of society change over time, so does the demand for, and our attitudes to, rural smallholdings. Land use policies therefore should continually adjust to these changing circumstances. Land use policies with regard to what is, or is not, allowed in rural areas, are primarily decided at the county or district level. Different counties face different situations, demands and constraints and hence different land use policies are needed. However, it is also desirable that within broader regions the policies of counties are to some-extent consistent. In this discussion paper, the authors specifically look at the desirability of rural smallholdings in the Wairarapa. This Discussion Paper is based on research undertaken by Mr G.D. Knighton as part of his postgraduate Diploma in Agricultural Economics. The research was supervised by Dr Anton Meister, Reader in Natural Resource and Environmental Economics.